South Korea's financial regulator on Thursday asked foreign securities firms to beef up efforts to prevent illegal stock short selling amid an increase in such cases.
The Financial Supervisory Service (FSS) made the request in a meeting with compliance officers of 23 foreign securities companies here, calling for an improvement in the companies' internal control system and an inspection of the companies' short selling process.
As of August, the FSS had imposed fines of a total of 10.18 billion won (US$7.6 million) in 27 cases, including 19 involving foreigners, this year over illegal stock short selling.
The number has been showing an upward trend from four in 2020, 14 in 2021 and 28 last year.
The FSS said it will continue to crack down on illegal short selling and look into the adequacy of securities firms' short selling process.
"We know that most stock short selling violations are made by mistake or error ... but such acts cannot be blamed on limits deriving from work or unavoidable business practices," an FSS official said.
In the meeting, the compliance officers agreed with the need to restore trust in the market by eradicating illegal stock short selling, but called for efforts to increase foreign investors' understanding of the South Korean market as there are differences in trading customs and regulations on the matter.
Source: Yonhap News Agency